Viking Therapeutics Inc (VKTX) 2021 Q1 法說會逐字稿

Welcome to the Viking Therapeutics' 2021 First Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded today, April 28, 2021. I would now like to turn the conference over to Viking's Manager of Investor Relations, Stephanie Diaz. Please go ahead, Stephanie.

Hello, and thank you all for participating in today's call. Joining me today is Brian Lian, Viking's President and CEO; and Greg Zante, Viking's CFO. Before we begin, I'd like to caution that comments made during this conference call, today, April 28, 2021, will contain forward-looking statements under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements about Viking's expectations regarding its development activities, time lines and milestones.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely, and reported results should not be considered as an indication of future performance. These forward-looking statements speak only as of today's date, and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters.

I'll now turn the call over to Brian Lian for his initial comments.

Thanks, Stephanie, and thanks to everyone listening on the webcast or by phone. Today, we'll provide an overview of our first quarter 2021 financial results as well as an update on recent progress and developments with our pipeline programs and operations. During the first quarter, we continued to build on the progress made over the past year with both of our thyroid hormone beta receptor agonist programs. With our lead program, VK2809 for the treatment of nonalcoholic steatohepatitis and fibrosis, we continued enrolling patients in our Phase IIb VOYAGE study and added new clinical sites in both the U.S. and outside the U.S.

During the first quarter, we also continued enrollment in a Phase I trial evaluating our second thyroid hormone beta receptor agonist, VK0214, for the treatment of X-linked adrenoleukodystrophy, or X ALD. This trial is advancing well, and we are nearing completion of this study's initial phase, evaluating VK0214 in healthy volunteers.

I'll provide additional detail on our development activities after we review our first quarter financial results. For that, I'll turn the call over to Greg Zante, Viking's CFO.

Thanks, Brian. In conjunction with my comments, I'd like to recommend that participants refer to Viking's Form 10-Q filing with the Securities and Exchange Commission, which we expect to file later today for additional details. I'll now go over our financial results for the quarter. Our research and development expenses for the 3 months ended March 31, 2021, were $11.5 million compared to $8.0 million for the same period in 2020. The increase was primarily due to increased expenses related to clinical studies, manufacturing for the company's drug candidates, salaries and benefits and stock-based compensation, partially offset by decreased expenses related to preclinical studies.

Our general and administrative expenses for the 3 months ended March 31, 2021 were $2.7 million compared to $3 million for the same period in 2020. The decrease was primarily due to decreased expenses related to stock-based compensation, legal and patent services, salaries and benefits and travel, partially offset by increased expenses related to professional fees and insurance.

For the 3 months ended March 31, 2021, Viking reported a net loss of $14 million or $0.19 per share compared to a net loss of $9.7 million or $0.13 per share in the corresponding period in 2020. The increase in net loss and net loss per share for the 3 months ended March 31, 2021 was primarily due to an increase in research and development expenses, partially offset by a decrease in general and administrative expenses, as noted previously, as well as decreased interest income primarily due to the decline in interest rates available throughout the first quarter of 2021 as compared to prevailing interest rate during the first quarter of 2020.

Turning to the balance sheet. At March 31, 2021, Viking held cash, cash equivalents and short-term investments totaling $241.7 million compared to $248.4 million as of December 31, 2020. This concludes my financial review, and I'll now turn the call back over to Brian.

Thanks, Greg. I'll now provide an update on the progress with our development programs, beginning with our lead program, VK2809. VK2809 is an orally available small molecule agonist of the thyroid hormone receptor that possesses selectivity for liver tissue as well as the beta receptor subtype.

To date, the clinical studies have demonstrated compelling evidence supporting the potential of VK2809 in the treatment of multiple metabolic disorders, including NASH and fibrosis.

Phase I studies in healthy volunteers as well as in subjects with mild hypercholesterolemia, have shown that treatment with VK2809 produces significant reductions in plasma lipids, including LDL cholesterol, triglycerides and atherogenic proteins.

In addition, we previously completed a 12-week Phase II study in patients with nonalcoholic fatty liver disease and hypercholesterolemia. This study successfully achieved its primary and secondary endpoint with patients receiving VK2809 demonstrating highly statistically significant reductions in liver fat content as well as improvements in LDL cholesterol. VK2809 also performed well on secondary measures, demonstrating significant reductions in other plasma lipids, such as triglycerides, apolipoprotein B and lipoprotein A. Importantly, no serious adverse events were reported in this trial among patients receiving VK2809 or placebo.

Initial data from this study as well as follow-up data have been highlighted in multiple oral presentations at key scientific meetings. Most recent among these was an oral presentation at the 2020 International Liver Congress, or EASL, where follow-up results from the study were presented. This presentation highlighted VK2809's durable benefit including among patients with key NASH risk factors.

At week 16, 4 weeks after completion of the 12-week treatment period in the study, VK2809-treated patients maintained a statistically significant 45% median reduction in liver fat content compared to a 19% reduction among patients receiving placebo.

Additionally, at week 16, 70% of VK2809-treated patients maintained a response defined as experiencing a greater than or equal to 30% relative reduction in liver fat content from baseline. Notably, all patients receiving the lowest evaluated dose of 5 milligrams of VK2809 daily maintained a response at week 16.

In addition to these data, new analyses of week 12 study results demonstrated significant reductions in liver fat among patients receiving VK2809 compared to placebo regardless of the presence of common NASH risk factors, including elevated baseline levels of ALT, a body mass index greater than 30, hypertension or hispanic ethnicity.

The totality of data from our Phase II study demonstrate VK2809's exceptional low dose potency on liver fat and plasma lipids as well as its durable effect and encouraging safety and tolerability profile. We believe that the observed reductions in other lipids may be an important indicator of cardiometabolic benefits for patients. This is an important distinction, which we believe represents an advantage when contrasted with mechanisms that have been associated with elevations in lipids known to increase cardiovascular risk. Overall, we believe the data to date position VK2809 as a best-in-class compound for the treatment of patients with NASH and fibrosis.

In late 2019, we advanced this program into a Phase IIb clinical trial. This trial called, VOYAGE, is a randomized, double-blind, placebo-controlled, multicenter trial designed to assess the efficacy, safety and tolerability of VK2809 in patients with biopsy-confirmed NASH and fibrosis. The study is targeting enrollment of approximately 340 patients across 5 treatment arms. The target population includes patients with F2 and F3 fibrosis as well as up to 25% with F1 fibrosis.

The primary endpoint of the study will evaluate the change in liver fat content as assessed by magnetic resonance imaging, proton density fat fraction from baseline to week 12 in patients treated with VK2809 as compared to patients receiving placebo.

Secondary objectives include the evaluations of histologic changes assessed by hepatic biopsy after 52 weeks of treatment.

During the first quarter, patient enrollment for this study continued at sites both within and outside the U.S. We continue to navigate a challenging enrollment environment due to the COVID-19 pandemic. That said, our U.S. sites remained open through the first quarter with none close to pandemic-related issues.

Outside the U.S., the environment is also challenging with many sites experiencing local lockdown restrictions that impact screening flow. Despite these hurdles, we have remained active in our site engagement efforts and continue to add sites both in the U.S. and outside the U.S. We currently remain on track to complete enrollment in this trial in the second half of 2021.

In parallel with our VOYAGE study efforts, we are also taking steps to prepare for the anticipated Phase III development of VK2809. As discussed on our last update call, we recently completed the formulation study evaluating tablet and soft gel formulations of VK2809 with potentially improved commercial profiles.

In addition, we also completed the study of VK2809 in patients with varying degrees of hepatic impairment. Both studies generated useful data for further planning and development activities, and we look forward to continued progress on the clinical and regulatory fronts in the months ahead.

I'll now provide an update on our second clinical program, VK0214. VK0214 is an orally available small molecule thyroid hormone receptor agonist with selectivity for the beta receptor subtype that we're developing as a potential treatment for the rare neurodegenerative disease called X-linked adrenoleukodystrophy.

Last year, we initiated a Phase I first-in-human study of VK0214. This trial is a randomized, double-blind, placebo-controlled, single ascending and multiple ascending dose study in healthy volunteers. The primary objectives of the study include the evaluation of the safety and tolerability of VK0214 as well as the pharmacokinetics of VK0214 following single and multiple oral doses.

We continue to make excellent progress with this study and expect to complete dosing in healthy volunteers in the near term. Pending an evaluation of the data, we plan to initiate a Phase Ib study of VK0214 in patients with X-ALD. We currently expect to initiate this trial around the middle of the year.

With 2 programs advancing through clinical developments, it is important to note that our balance sheet remains strong. As Greg stated, we ended the quarter with approximately $242 million in cash, which gives us ample runway to complete multiple clinical milestones that will drive future value for the company.

In conclusion, we continue to make progress in the first quarter with both of our ongoing clinical trials. With VK2809, we expect to complete enrollment in the 52-week Phase IIb VOYAGE study in patients with NASH and fibrosis in the second half of 2021. Based on data to date, we continue to believe that VK2809, they represent a best-in-class compound for the treatment of NASH and fibrosis.

With VK0214 we are nearing completion of a Phase I single and multiple ascending dose study in healthy volunteers. Pending a successful outcome, we plan to initiate a Phase Ib study in X-ALD patients. We believe VK0214 represents a novel approach to treating this debilitating disease, and we look forward to evaluating its effect on key biomarkers.

Finally, we ended the quarter with a strong balance sheet, providing the runway to complete our ongoing clinical studies as well as up other important milestones.

This concludes our prepared comments for today. Thanks again for joining us, and we'll now open the call for questions. Operator?

(Operator Instructions) The first question will come from Steve Seedhouse of Raymond James.

This is Ryan Deschner on for Steve Seedhouse. It might be a little early for this question, but in light of the recent FGF21 data in cirrhotic NASH. To what extent are you considering an F4 cirrhotic NASH study post Phase IIb data? And what data from the Phase IIb study would you be focusing on to aid in making that decision?

Ryan, thanks for the question. At this point, we're not planning a cirrhotic NASH study. That would change, of course, depending on what the Phase IIb data look like. But it's not something that we're considering right now. I think we would base that decision on what the histology data look like on fibrosis after the 52-week treatment period. But at this point, it's not in the works.

Okay. And one more quick question. I was wondering if you could give us any more detail on the structure and the size of the PoC study, a proof-of-concept study in X-ALD.

Yes. We haven't disclosed really the structure there. We will, once the trial is initiated, but it will be a limited number of doses with a handful of patients in each dose, and we'll get more detail when we initiate the study.

Next question is from Michael Morabito of Chardan Capital Markets.

So I want to know the other studies that you've done for 2809 with the formulation in the hepatic impairment, particularly. Should we expect to see that at medical meetings this year, either it's EASL or AASLD? And as a follow-on to the previous question, the study in the hepatic impairment, do you think that, that will lead to any additional clinical trials to expand the potential label of 2809?

Michael, thanks for the question. No, we're not planning to present those data at any upcoming conferences. It was really with the formulation studies, they were really intended to develop a more commercial-friendly form, and we have now great options with the soft gel and the tablet.

With the hepatic impairment study, that was just a requirement from FDA for everybody in NASH, looking at -- trying to see if there are any safety risks or PK changes in patients with more severe hepatic impairment, and we didn't see any. So we don't expect to have any limitations depending on -- or pending hepatic impairment. But we wouldn't be planning to present those at any of the upcoming conferences.

Okay. And just out of curiosity, you've mentioned the cash runway allows you to complete all of your planned studies. Does that runway include any additional studies that have not been mentioned or to move to initial studies, what would be necessary from a capital perspective to say, move into Phase III or advanced X-ALD into a Phase II/III?

Yes, I can take that. The -- I think we've got enough runway to get through certainly a Phase III trial with X-ALD and well into, if not fully through, the biopsy endpoint in a Phase III trial with the VK2809.

The next question comes from Matthew Luchini of BMO.

This is [Jen] on for Matthew. Congrats on the progress. 2 for me. So assuming that you guys choose to use a different formulation following the formulation work, like if you guys were to use a different formulation than what was used in VOYAGE trial? Is there any gating step before or moving on to Phase III? And for VOYAGE data, what is your -- like what do you think you need to achieve to remain competitive in NASH? And I have a follow-up after that.

Sure. Thanks, [Jen]. So the reason we did the study looking at different formulations. That's kind of the -- that was the study that we would plan to do, sort of a bridging study to look at bioavailability differences that sort of thing. And so I think we've checked that box with -- what was the second question?

Is there a gating step for moving into Phase III regarding formulation? And what are -- what do you think you need to achieve in VOYAGE trial to remain competitive in NASH?

Yes. No, we think we've accomplished whatever gating step would be required with the formulation. We think the data that we've seen to date are pretty competitive. We think that's among the best, if not the best, liver fat reduction from any oral agent. And so I think we're competitive. And if the Phase IIb data look remotely similar to the Phase IIa, I think we would be competitive as an oral agent, particularly when you consider the profile with the broad effects on cardiovascular metrics, LDL reduction, triglyceride reduction, atherogenic protein improvements. All of those, I think, are very, very important in this population. And we don't have any pervasions in the negative direction on lipids that might cause polypharmacy to be considered right off the bat. So I think we're really, really competitive overall with the profile.

Okay. That's helpful. And my second question is, can we still expect data from Phase I SAD/MAD trial for 0214 first half this year? And for the PoC -- Phase Ib PoC trial, if that were to start mid-year, when can we expect the data?

Yes. We've -- on prior calls, we've talked about having some announcement describing the data in the first half. And I think we're still on track for that. With completion and announcement of data from the Phase Ib study, it depends on how quickly that enrolls. It's difficult to project right now, but we'll report the data as soon as it's available. I would anticipate that, that's probably a 2022 event. But if we can do it sooner, we'll report the data sooner.

Next question is from Derek Archila of Stifel.

This is Ben on for Derek. Two from us. Just building off that last question. Just on 214 in the Phase I study. Have you thought any more about how do you present these data, whether it's at your conference or just a PR of some sort? And then the second one, from a modeling perspective, are there any qualitative comments you can share about kind of the OpEx ramp in 2021? Just in light of the 214 and 2809 studies on picking up?

You want to take that, Greg?

Sure. The second part, I'd say, from an OpEx standpoint, we'll probably going to be in the 50% to 70% increase range from last year. Just to give you some perspective on that.

And with the data presentation, we'll have to see the data first before we make that decision. So I think minimally, we would plan for press release and potentially then present more detailed data at a conference in the future. But I think press release is the first step there.

The next question is from Andy Hsieh of William Blair.

So, one, looking at the new slide deck, Brian, I think we have more information about the gene expression analysis on 2809. Just curious, maybe you can describe for us the findings. And just curious, is that like a new study that you've done or basically kind of just a presentation of a previous study -- preclinical study before?

Yes. Andy, that was updated data from a study that we presented at EASL, I believe in 2017 or '18, one of those EASL conferences, the gene expression, the RNA sequencing data. And we thought it was interesting because generally, you see improvement in genes associated with insulin sensitivity and lipid metabolism and a suppression of gene expression for those genes associated with fibrotic signaling.

So I think by themselves, maybe they wouldn't be as exciting. But when you look at the histology from the same study, we see a 70% reduction in liver fat content, and we saw a 50% reduction in fibrosis in that study. So really nicely corroborates what was observed on the histologic assessments there.

Got it. Okay. That's helpful. Another thing is about kind of the vaccine rollout, more and more percentage of the population are getting the vaccine. So just curious about both the X-ALD, healthy volunteer study and also the VOYAGE study. Is there any sort of washout period that the participants have to go through? And also from a behavioral perspective, are you seeing kind of an increase of patients being more open to participating in clinical trials, just given the fact that these are -- they are more -- they're fully vaccinated?

Yes. And it's an interesting question. I am not aware of any restrictions on vaccine timing and screening or enrollment. So you have to assume that many of the patients in the studies, both the healthy volunteer and the VOYAGE study, have received their vaccinations. We've heard no comments or problems.

And with regard to the second question, I think that we are seeing maybe a little bit better environment now than in the November through February time frame, but still very, very challenging when you think about the general hesitancy given that we're right, coming off the back of the pandemic now, and I think people are generally still pretty cautious about everything.

The next question is from Jay Olson of Oppenheimer.

Now that you've identified the second half of 2021 is target time frame for completing enrollment of the VOYAGE study. Does that mean that we should expect to see the 12-week interim analysis of MRI-PDFF in the first part of '22?

Yes. Jay. So we've always said that once we announce completion of enrollment that we would probably have the data on that primary endpoint, ready for announcement 16 to 20 weeks later. So it's hard to give a specific time frame to it. But once we announce completion, that's what I would think about. You treat the last patient for 12 weeks. It's another 4 to 8 weeks for data cleanup and get things ready to announce. And I think that adds up to 16 to 20 weeks, 4 to 5 months, something like that. But that's about as specific as we've been so far.

Okay. And then I was just curious about any read across you expect from MAESTRO-NAFLD-1 study that's going to read out by the end of the year. And if you could share your thoughts with us on the potential to follow a similar registration strategy?

Well, I think both agents are following a similar strategy for NASH, which is the only indication, I think, that's out there right now for fatty liver disease with a registration pathway. And as far as the read through, I think the overall, the compounds look fairly similar on liver fat. So at least from what we've seen with the early data from that compound. So I wouldn't necessarily expect much difference from what we've seen thus far.

Would you consider conducting a study with similar design to MAESTRO-NAFLD-1?

At this point, no, but that could change, but not at this point. We know from our Phase IIa study that the drug is profoundly active in that population. So it's not clear at this point, what a Phase III trial might -- what new information at Phase III trial might generate for us.

Next question comes from Scott Henry of ROTH Capital.

First, for clarification, I just want to make sure I heard this correctly. Do you expect operating expenses to be up 50% to 70% in 2021 from 2020?

I think, Scott, it's probably 50% closer to range. I mean, we were at about 43% last year and I had expected to go up, and it's really all driven by our external spending related to our trials here.

Okay. Perfect. And then perhaps on a big picture type of question. When we think about VK2809 in and potential partnership interest. Would you expect that to increase perhaps just after the 12-week data or do you think partners would be interested in also seeing the 12-month dosing data as you start to prepare for a Phase III program?

Scott, yes, it's a great question, and it's unclear. I mean, we know that some are very interested in the histology endpoints and confirmation that the mechanism is effective in this disease. But we also know that there is a lot of interest in our 12-week data from the ongoing study ahead of the second biopsy read. So I don't know, it's always hard to predict partnering activities. But we do think there's a fair amount of interest in both of those time points.

(Operator Instructions) The next question comes from Mayank Mamtani of B. Riley FBR.

This is Sahil Kazmi on for Mayank. Congrats on the progress. Maybe starting first on 2809. Just a quick one on enrollment dynamics. Could you talk to how you see it sort of shaking out by the end of the year in terms of U.S. versus EU site split and then also F1 to F3 patients?

And then just regarding the secondary endpoint of change in histology at 12 months. Can you talk to some of the underlying assumptions? Is this something that's powered to show statistical significance?

Yes. So we haven't disclosed the statistical assumptions there as far as the histology changes. We think we're adequately powered to show a benefit on NASH resolution. And as far as the enrollment contributions, right now, we feel that likely it's going to be a U.S. heavy enrollment distribution relative to ex U.S., but that could change. It just seems like Europe is a little bit behind the U.S. with the emergence from the pandemic as far.

As the breakout of fibrosis enrolled thus far, we really haven't talked about what we've seen on the demographics at this point. But we've said we can allow up to 25% F1s as long as they have another risk factor like diabetes, obesity, hypertension, something like that, that predisposes them to metabolic syndrome. But we haven't given breakouts on what we're seeing live.

Got it. That's helpful. And maybe as a brief follow-up, could you provide any color on how you think the placebo effect or rather the effect size may be modulated in the context of the ongoing pandemic?

Well, the placebo effects, the way we've always thought about it as on both NASH resolution and fibrosis. It seems to be in the mid-teens to low 20% range, and that's been fairly consistent across most of these histology readouts. I don't -- I wouldn't expect the pandemic to really impact that significantly one way or another, their histology reads. So I wouldn't expect anything from COVID to really have an impact there.

Okay, great. And then maybe just a brief one on 0214. I appreciate that you're going to disclose a bit more of the study details once we get closer to that Phase Ib. But if you could provide some qualitative color on is there going to be any background treatment allowed for these patients? And how you might use the study to enrich the patient population in the future? And then what you anticipate might be sort of the treatment window required to see a meaningful clinical benefit?

Sure. Well, there's nothing approved right now for these individuals. So we don't really think that there's much need to control on the background therapies. We would expect the registration endpoints to be a little bit longer term, 12 to 24 months focused on function. But that's based on prior Phase II and II/III studies that have been completed, probably going to be focused on gate. But as far as enriching the population, we'll have to see what the Phase Ib data look like before we discuss what the ideal target population is for Phase III.

And this concludes our question-and-answer session. I would now like to turn the conference back over to Stephanie Diaz for any closing remarks.

Thank you again for your participation and continued support of Viking Therapeutics. We look forward to updating you again in the coming months. Thank you.

The conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines. Have a great day.